Calvert v. County of Yuba (December 5, 2006, C047857)__Cal.App.4th__ http://www.courtinfo.ca.gov/opinions/

By Lori Wider

The Court of Appeal, Third Appellate District, held that a vested rights determination under the Surface Mining and Reclamation Act ("SMARA") regarding surface mining operations in the diminishing asset context is subject to the procedural due process requirements for reasonable notice and an opportunity to be heard.  The County of Yuba ("County") in this case made a determination that Western Aggregates LLC ("Western") had a vested right to mine aggregate from an area within the Yuba Goldfields.  The County had invited Western and other surface mining operators to apply for a vested rights determination following a decision by a superior court in a prior lawsuit that a zoning authorization was not an adequate substitute for a SMARA permit.  In determining that a public adjudicatory hearing, with reasonable notice and an opportunity to be heard, was required, the Court of Appeal specifically limited its holding to a vested rights claim to conduct a surface mining operation subject to the diminishing asset doctrine.  Therefore, it is not clear whether this decision has any broader application or implication beyond the facts of this case.

SMARA provides that where a vested right to undertake surface mining operations was secured prior to January 1, 1976, a permit to operate under SMARA is not required, provided the work continues and there are no substantial changes made in the mining operations.  A vested right is secured through good faith reliance on a permit or other authorization (if required), diligently commencing surface mining operations and incurring substantial liabilities for work and materials necessary to the operation.  For all mining operations conducted after January 1, 1976, the requirements for a reclamation plan and financial assurances continue to apply under SMARA.

With primary responsibility for implementing the provisions of SMARA at the local level, as allowed under SMARA, the County determined that Western had a vested right to mine aggregate (sand, gravel and rock) from approximately 3,400 acres in the Yuba Goldfields.  The determination was made without notice to adjacent landowners or to the public generally.  No hearing was held in connection with the determination.  An adjacent landowner and the Yuba Goldfields Access Coalition, a nonprofit organization that includes Yuba County residents and taxpayers, sued to challenge the vested rights determination.  While a number of claims were asserted, the primary claim addressed by the Court of Appeal in its decision was an alleged violation by the County of due process requirements of notice and a hearing in making the vested rights determination.  Petitioners sought a writ of mandate to remand the matter for further proceedings.  The trial court, on this claim only, granted the Petitioner’s summary adjudication.  The Court of Appeal agreed, holding that the vested rights determination was subject to procedural due process requirements of reasonable notice and opportunity to be heard.

Discussing the three general types of actions that local government agencies take in land use matters—legislative, adjudicative and ministerial—the Court determined that the County’s action constituted an adjudicative action.  Citing the California Supreme Court’s decision in Horn v. County of Ventura (1979) 24 Cal.3d 605, the Court of Appeal stated that an adjudicative action generally requires procedural due process for notice and a hearing where the action implicates a significant or substantial property deprivation.  While Western argued that the County’s vested right determination was ministerial and, therefore, did not trigger the notice and hearing due process requirement, the Court disagreed.  It found that the SMARA provision which exempts a mining operation from permit requirements where a vested right has been secured involves factual issues that are not ministerial and which must be resolved through the adjudicative exercise of judgment.  These include a determination that the vested right has continued and that no substantial changes have been made to the operation.  Similarly, whether there has been good faith reliance on a permit or other authorization and whether substantial liabilities have been incurred for work and materials also are factual issues that must be addressed in making a vested rights determination.

The Court focused not only on the factual issues under SMARA but also on the vested rights determination in the "diminishing asset" context.  Since the land itself is a "diminishing asset" requiring the expansion of mining activities over time into nonexcavated areas to continue the land use (in contrast to other uses in which the land is incidental to the uses conducted upon it), the vested rights determination implicated the question of whether the land to be mined was "clearly intended" to be excavated—a question to be addressed through "objective manifestations" and not "subjective intent."

Having determined that the County’s action was adjudicative, the Court examined the question of whether the action implicated "significant or substantial deprivations of property" which under Horn, supra, and other cases following the Horn decision, which would trigger procedural due process protections.  Since Western was claiming a three fold increase to mine on 3,400 acres as compared to its then 1,200 acres of mined area, the Court stated that the County decision could substantially affect the rights of Petitioner Culvert and other adjacent property owners.  In the land use context, this could constitute a property "deprivation" triggering procedural due process requirements for notice and an opportunity to be heard.

The Court made it clear that its holding is limited to a claim of vested rights to surface mine in the diminishing asset context.  Addressing the question of whether the Court’s decision should be applied prospectively or retroactively, the Court struck a middle ground:  limited retroactive application.  The decision will apply to cases in which no final judgment on appeal has been rendered as of the date of the Court’s decision   The Court stated that Western would either have to prove its claim of vested rights in a public adjudicatory hearing or obtain a permit (also in a public adjudicatory hearing) to conduct surface mining operations.

For more information please contact Lori Wider.  Lori Wider is special counsel in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco Office.